Book Review - "We Deserve Better" by Hemlock

Regular readers of Hemlock’s blog would be a little surprised, if refreshingly, at the balanced manner in which he presents his thoughtful account and analysis of Hong Kong’s economic and political situation in the decade since the handover in his new book “We Deserve Better – Hong Kong Since 1997”. I, for one, would have expected a more vitriolic and passionate tongue-lashing version, having always been impressed by his power to move the blog audience with his humorous and trenchant style as well as his cool logic.

With the first twelve chapters devoted to meticulous accounts of significant happenings within Hong Kong’s society in the last ten years, punctuated with fair and honest comments on their social, economic and political impacts, it is only through the last three chapters of the book that the author lets us in to his deep-seated and well-meaning thoughts about what he would like to see happening in the years ahead.

As balanced as his tone may be, Hemlock makes no excuses for lambasting the act which economists call “rent-seeking” by “the tycoons operating the property cartel, who made the easiest and biggest money in town” and the government’s land system which “just puts it in their lap”.

How Hong Kong’s ills stem from the land system can perhaps be summed up by these passages:-

“The discretionary planning and land use powers enjoyed by bureaucrats combined with the huge fortunes to be made by real estate and construction companies create a substantial moral hazard, though the government would argue vociferously that stringent checks and balances are in place. Certainly, at a very fundamental level, the whole pattern of land supply and revenues, secretive planning, overspending on infrastructure, cartelization in the property development and construction sectors, and political representation for commercial interests can be described as institutionalized corruption. But there is no law against it.”

“The property developers pass their costs on to consumers; thanks to government land policy, they are able to add a very handsome margin of their own. It is impossible to say exactly who is ultimately paying this hidden tax. Home mortgage payers and private sector renters are obviously contributing, but with costs being passed down throughout the community, it is likely that the revenue-from-land system creates a morass of hidden transfers and subsidies, many of which probably flow from the deserving to the less so. The economic concentration that results from this system deprives consumers of the benefits of competition and choice and almost certainly deprives smaller and innovative entrepreneurs and labour of opportunities.”

Hemlock concedes that to detach the tycoons from the government, the land policy from the revenue system, and the bureaucrats from the discretionary powers would be extremely difficult and painful. He believes that the only hope for the city to capitalize on all its strengths and advantages, unencumbered by its current weaknesses, is serious reform of the political structure.

That said, he is also acutely aware of the impasses to political reform, pointing out that as long as China is a one-party state, insisting on universal suffrage as the only alternative is equivalent to insisting on the unattainable and would be a main obstacle to any political reform. His improvising of a televised address by China’s head of state to Hong Kong shows that he has much more than a perfunctory understanding of Chinese politics:-

“Your city is part of a one-party state. No possible or potential rival to CCP rule, however theoretical, unlikely or obscure, is permitted – and no past or present law, treaty or promise overrides that. It therefore follows that Hong Kong may not form its government in any way that gives disloyal or undependable elements any chance of holding power. Full universal suffrage would violate this rule. Demanding universal suffrage is therefore pointless. It is also guaranteed to provoke our hostility, because it is tantamount to demanding the right to threaten one-party rule.”

Despite his perception of this stark truth, he fantasizes an optimistic scenario in which all factions come to their senses after realizing that the status quo is not an option and make important concessions, thus enabling the much needed reforms to take place. By “all factions” he means Beijing officials, Hong Kong bureaucrats, the business community, the pro-Beijing camp and the pro-democracy camp.

On a lighter note, Hemlock notices that like the law, freedom of speech ten years after the handover is not totally unscathed but is very much alive and basically well. He believes that self-censorship is aimed at appeasing Beijing for commercial gain rather than brainwashing the Hong Kong public with propaganda.

The book is not only a must-read for Hong Kong’s politicians, bureaucrats, oligarchs and citizens, it is also a must-read for the Beijing leaders and mainland officials, if they truly have Hong Kong’s well-being at heart and want her to thrive.